VA will seek payback for failed system

Officials will try to recover millions from the contractor that put together the flawed Bay Pines computer system.

By PAUL DE LA GARZA
Published October 1, 2004

ST. PETERSBURG - The federal government will attempt to recoup some of the millions of dollars paid to technology contractor BearingPoint for a failed $472-million computer project that led to widespread problems at Bay Pines VA Medical Center.

BearingPoint, one of the world's largest business consulting and systems integration firms, was paid nearly $117-million to put together the Core Financial and Logistics System.

In July, the Department of Veterans Affairs yanked the pilot computer system at Bay Pines because it did not work. A month later the Justice Department said it would launch a preliminary criminal inquiry of CoreFLS.

"What I can tell you is that the VA plans to take necessary steps to seek a recoupment of some of the funds that BearingPoint received because of CoreFLS," U.S. Rep. C. W. Bill Young, chairman of the House Appropriations Committee, said Thursday. "I don't know what the number is."

VA Secretary Anthony Principi has ordered a legal review to determine whether the VA could recover some of the money from BearingPoint, said VA spokeswoman Cynthia Church.

BearingPoint spokesman John Schneidawind said he was unaware of any VA decision.

In a separate blow to BearingPoint on Thursday, the state of Florida canceled a $173-million contract with two companies - BearingPoint and Accenture - to maintain and overhaul the state's computer hardware.

The cancellation came two months after auditors questioned how the two companies had won the lucrative contracts.

Back to the old

At Bay Pines today, the beginning of the new federal fiscal year, the VA will begin the process of returning the hospital from CoreFLS to the old computer system.

In February, the VA and Congress launched a series of investigations of CoreFLS and Bay Pines after articles in the St. Petersburg Times chronicled flaws with the system.

Management and software problems forced the hospital to cancel surgeries. Vendors said they were not getting paid.

VA officials declined to discuss how Bay Pines planned to change computer systems without disrupting medical care to veterans. About 400,000 veterans are eligible for treatment at Bay Pines.

An assessment of CoreFLS by Carnegie Mellon University said repairing the data and transactions in CoreFLS would be difficult.

"It is crucial that all stakeholders . . . realize that the repairs may be ugly . . . and short-lived. The object . . . should be to stop the bleeding, get mission-critical operations minimally working and do no further harm."

In recent months, according to internal VA communications, Bay Pines has established multiple teams to prepare for the switch.

The teams have examined issues such as closing the hospital's books and adapting at least one major piece of software from CoreFLS to the old system.

The change will not happen overnight.

"Everyone should understand that we will not be able to implement an automated solution in the amount of time we have available," an internal VA memo said. "Rather, the interim solution will be the first step toward automating, in that it will help us define the processes and help make sure that we are all on the same page."

Another transition

Before July, Bay Pines had no backup plan in the event CoreFLS failed.

But hospital officials say the transition should not be overly complicated because staff already is familiar with the old system.

"What they've told me is that all of the preparations to do that, to go back to (the old system), have been working very well," Young said, "and they're satisfied that it is going to be a successful move."

Yancy Dorn, union chief at Bay Pines, welcomed the change in systems. He said CoreFLS had made people's jobs more difficult.

Dorn said VA management had left hospital staff in the dark on reversion plans.

CoreFLS was developed in an attempt to help bring the VA into compliance with federal regulations on how government agencies manage their budgets.

At the VA, the system was designed to track finances, payments to vendors and inventories. The VA installed the pilot at Bay Pines last Oct. 6, despite repeated warnings by federal investigators and hospital staff that it was not ready because of multiple software kinks.

The Carnegie assessment said CoreFLS could serve "as an exemplary case study in how not to do technology transition."

Congress alloted $472-million for CoreFLS. As of August, the VA had spent $278-million.

Two months ago, VA officials acknowledged that the agency technically was in violation of federal law by not having a working computer system to keep better track of its finances. Officials said they were working to resolve the problem.